Fabulous Friday for India Inc

It was a fabulous Friday for India Inc, which had been waiting for some tough action from the UPA (United Progressive Alliance) II on the reform front. And when the announcement did come, it was a torrent.

Pleasantly surprised by the sheer magnitude of the far-reaching measures unleashed by the government, leading industrialists have reacted with a great sense of relief. Many quickly went into ‘twitter’ mode to hail the government.

“From a famine of policy action, we’ve moved to a feast. The government’s got back its gumption! We cheer & urge that they stay the course,’’ tweeted industrialist Anand Mahindra.

An elated Vijay Mallya, who is also the owner of Kingfisher Airlines, which has been battling huge debt, tweeted thus: “Bold decisions taken by government. Fantastic to restore confidence and kick-start economic growth opportunities.”

Y. C. Deveshwar, Chairman, ITC, who is in Chennai for the inauguration of the ITC Grand Chola on Saturday, said, “the policies announced will stimulate a positive growth environment, and enhance business optimism. It will indeed be important that FDI in multi-brand retail benefits the Indian farmer and creates sustainable value chains.”

Venu Srinivasan, Chairman, TVS Motor, felt the announcements would send an unequivocal signal to the world at large that “India is a place where people can invest.” Mr. Srinivasan showered praise on Union Commerce and Industry Minister Anand Sharma for playing a singular role in pushing these reform measures. The announcements, he said, also betrayed a sense of seriousness on the part of the government, which had come under assault from all quarters for its alleged indecision. “I don’t think the government will buckle down this time round,” Mr. Srinivasan felt. On allowing FDI in multi-brand especially, he said, “I don’t understand why it is being looked at as the holy-cow of the Indian politics.” According to him, “it (FDI in multi-brand retail) has become a symbol for people to fight, rather than opposition with substance.” In this context, he pointed to “a significantly high level of wastage” in farm products due to lack of efficient storage, package, transport and assorted systems in the country. These (reform steps) were unavoidable if fiscal deficits were to be contained. “The high fiscal deficit is already crowding out private borrowing and jobs,” he said.

Bold and visionary moves

Mallika Srinivasan, Chairman of TAFE, a leading tractor maker, felt, these were bold and visionary moves, and a welcome one at that. “We must thank the commerce minister and the government for this,” she said. According to her, the opening up of multi-brand retail for FDI would help farmers get a better return. “I guess it is a well debated and discussed move, and will be implemented,” she said. This, in effect, would improve productivity and processes in the farm sector, she added. The FDI in multi-brand, she felt, would also result in greater investment into areas such as cold storage and transportation.

Another Chennai-based industrialist, who declined to be quoted, was worried about the political consequences of these announcements, and their fall-outs on the prevailing economic scene. “These could create a huge political backlash. One has to wait and see how that will pan out on the economy,” he added.